Transcript What is Marketing

Unit 1
Introduction to Marketing
Marketing….. defined
 The Chartered Institute of Marketing define
marketing as
'The management process responsible
for identifying , anticipating and satisfying
customer requirements profitably'
Marketing….. defined
 Philip Kotler defines marketing as
'satisfying needs and wants through an
exchange process'
Marketing….. defined
 P.Tailor of suggests that
'Marketing is not only about providing
products or services it is essentially about
providing changing benefits to the changing
needs and demands of the customer
Marketing….. defined
 Several experts argue that
Marketing is the management process
responsible for identifying, anticipating and
satisfying customers’ requirements
profitably
What is Marketing?
 Marketing is all about –
- Identifying the need of the customer and developing
product accordingly
- Spreading awareness /creation of need
- Building relationships with the customers
- Ensuring maximum customer satisfaction
The Extended Marketing Mix
 Product
 Price
 Place
 Promotion
 People
 Process
 Physical evidence
Marketing mix
Product
 Product development
 Product management
 Product features and benefits
 Branding
 Packaging
 After-sales services
Marketing mix
Price
 Costs
 Profitability
 Value for money
 Competitiveness
 Incentives
 Quality
 Status
Marketing mix
Place
 Target market
 Channel structure
 Channel management
 Logistics management
Marketing mix
Promotion
 Developing promotional mixes
 Advertising management
 Sales promotion
 Sales management
 Public relations
 Direct marketing
Marketing mix
People
 Staff capability
 Efficiency
 Availability
 Effectiveness
 Customer interaction
 Internal marketing
 External marketing
Marketing mix
Process
 Order processing
 Database management
 Service delivery
 Queuing system
 Standardisation
Marketing mix
Physical evidence
 Environment
- Furnishing
- Color
- Layout
- Noise level
The Production Concept
 This concept holds the notion that a customer will
prefer a product that is easily available and
affordable.
 The main task that has to be performed by the
marketing manager is to see that the production is
done a mass scale and the goods are available easily.
Product Concept
 The product concept holds the notion that a
customer will prefer those products that are of
supreme quality. Therefore, the main task of any
marketing manager is improve the quality of the
product at every stage of production process.
 Under this concept, the companies are so focused in
improving the quality of their products that they
don’t pay attention on what the customer needs.
Product Concept
 An excess focus on the product and not on the
customers leads to “Marketing Myopia” amongst the
companies.
 Marketing Myopia is dangerous because it does not
allows the companies to explore more effective and
efficient ways of serving the customers needs.
Selling Concept
 Many organizations follow the selling concept, which
holds that consumers will not buy enough of the
organization's products unless it undertakes a large
scale selling and promotion effort.
 Their aim is to sell what they make rather than make
what the market wants. Such an effort carriers high
risks
Selling Concept
 It focuses on creating sales transactions rather than
on building long-term, profitable relationships with
customers.
 It assumes that customers who are convinced to buy
a product will like it. Or if they don't like it, they will
possibly forget disappointment and buy it again
later.
Marketing Concept
 Under this concept, the customer needs are
discovered and all the efforts are devoted to satisfy
the need of the customers.
 A company practicing this concept achieves the
corporate objectives by meeting the customer needs
in an efficient way than its competitors.
 All the initiatives are taken to provide customer
satisfaction and establish a long term relationship
with the customers.
Societal Marketing Concept
 The societal marketing concept is an enlightened
marketing concept that holds that a company should
make good marketing decisions by considering
consumers' wants, the company's requirements, and
society's long-term interests. It is closely linked with
the principles of corporate social responsibility.
Societal Marketing Concept
 Most companies recognize that socially responsible
activities improve their image among customers,
stockholders, the financial community, and other
relevant publics. Ethical and socially responsible
practices are simply good business, resulting not
only in favorable image, but ultimately in increased
sales.
Unit 2
Marketing Environment
 All the surroundings that can affect the working of
an organization comprises of the marketing
environment.
 There are two key perspectives on the marketing
environment, namely the 'internal environment‘ and
the external environment
Internal Environment
 All factors that are internal to the organization are
known as the 'internal environment'. They are
generally audited by applying the 'Five Ms' which are
Men, Money, Machinery, Materials and Markets.
The internal environment is as important for
managing change in an organization. The internal
factors are, more or less, under the control of the
management.
External Environment
 All those factors that are outside the organization
and are ,more or less, uncontrollable for the
management are known as external environmental
factors. For example Political, economic, social and
technological factors belongs to the external
environment.
 The external environment can be audited in more
detail using other approaches such as SWOT
Analysis and PEST Analysis.
PEST Analysis
 Political factors
 Economic factors
 Social factors
 Technological factors
Market Segmentation
 Market segmentation is the identification of portions
of the market that are different from one another.
Segmentation allows the firm to better satisfy the
needs of its potential customers.
 The marketing concept calls for understanding
customers and satisfying their needs better than the
competition. Therefore, for different customer, the
concept of segmentation helps in understanding the
needs.
Basis for segmentation
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1) Geographic Segmentation
The following are some examples of geographic
variables often used in segmentation.
Region: by continent, country, state, or even
neighborhood
Size of metropolitan area: segmented according to
size of population
Population density: often classified as urban,
suburban, or rural
Basis for segmentation
2) Demographic Segmentation
Some demographic segmentation variables include:
 Age
 Gender
 Income
 Occupation
 Education
 Religion
Basis for segmentation
3) Psychographic Segmentation
Psychographic segmentation can be done on the
basis of AIO Attitude
 Interests
 Opinions
Basis for segmentation
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4) Behavioralistic Segmentation
Behavioral segmentation is based on actual customer
behavior toward products. It include:
Benefits sought
Usage rate
Brand loyalty
User status: potential, first-time, regular, etc.
Occasions: holidays and events that stimulate
purchases
Targeting
 After the market has been separated into its
segments, the marketer will select a segment or
series of segments and 'target' them.
 The first is the single segment with a single product.
In other word, the marketer targets a single product
offering at a single segment in a market with many
segments. For example, British Airway's Concorde is
a high value product aimed specifically at business
people and tourists willing to pay more for speed.
Targeting
 Secondly the marketer could ignore the differences
in the segments, and choose to aim a single product
at all segments i.e. the whole market. This is typical
in 'mass marketing'. An example of this is the
approach taken by budget airlines such as Go.
 Finally there is a multi-segment approach. Here a
marketer will target a variety of different segments
with a series of differentiated products. This is
typical in the motor industry
Positioning
 Positioning has come to mean the process by which
marketers try to create an image or identity in the
minds of their target market for its product, brand,
or organization.
 Positioning is all about 'perception'. As perception
differs from person to person, so do the results of the
positioning. For example, what you perceive as
quality, value for money, etc, is different to my
perception. However, there might be similarities as
well.
Positioning
 Brand Positioning - Brand Positioning can be defined as an activity of
creating a brand offer in such a manner that it occupies a distinctive
place and value in the target customer’s mind
 According to Scott Davis, a company should change its positioning in
every 3 – 5 years
 For example –
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Kotak Mahindra –
Wal-Mart
Big Bazaar
Tata
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“Think investment, think Kotak”
“Always low prices, Always….”
“Isse sasta aur acha aur kahin nahin”
”Improving the quality of life”
Positioning of Liril
Liril was positioned on the freshness platform
right from its birth. The girl and the waterfall with
the unique jingle ensured that the freshness is
experienced by the audience. Liril can be called as
an experiential brand and the communication
perfectly supported that.
Liril did not change its positioning for 25 years
although the models changed, the brand
communication was consistent.
Positioning of Dominos
 Dominos Pizza have positioned them selves in the
minds of the consumers as “fast home delivery of
pizza under 30 minutes”. Because of this “Pizza Hut”
has become the place to go and eat pizza but
“Dominos” is what you think of when you think
home delivery of pizza. This is what positioning is all
about. Finding a place in the customers head.
Positioning Strategies
 POSITIONING BY PRODUCT ATTRIBUTES AND
BENEFITS
- Ariel that offers a specific benefit of cleaning even the
dirtiest of clothes because of the micro cleaning system
in the product.
- Colgate offers benefits of preventing cavity and fresh
breath.
- Maruti Suzuki offers benefits of maximum fuel efficiency
and safety over its competitors.
Positioning Strategies
 POSITIONING BY PRICE/ QUALITY
- Parle Bisleri – “Bada Bisleri, same price”
- Vishal Megamart – value retailer
- Wal-Mart – “Always low prices, always”
Positioning Strategies
 POSITIONING BY COMPETITOR
- Onida was positioned against the giants in the television
industry through this strategy, ONIDA colour TV was
launched with the message that all others were clones
and only Onida was the leader. “neighbor's Envy, Owners
Pride”.
- Rin V/S Tide controversy
Repositioning a Brand
Brand Repositioning is changing the positioning
of a brand. A particular positioning statement
may not work with a brand.
 Re-positioning involves changing the identity of a
product, relative to the identity of competing
products, in the collective minds of the target
market.
Repositioning a Brand
 For instance, Dettol toilet soap was positioned as a beauty soap
initially. This was not in line with its core values. Dettol, the
parent brand (anti-septic liquid) was known for its ability to
heal cuts and gashes. The extension's 'beauty' positioning was
not in tune with the parent’s “germ-kill” positioning.
 The soap, therefore, had to be repositioned as a “germ-kill”
soap (“bath for grimy occasions'') and it fared extremely well
after repositioning. Here, the soap had to be repositioned for
image mismatch. There are several other reasons for
repositioning. Often falling or stagnant sales is responsible for
repositioning exercises.
Repositioning a Brand
 Maharaja - the positioning:
 Dishwasher in its initial Stages was possibly seen as an exotic
product. Thus, Maharaja positioned it as a product aimed at the
upper crust. Thus, the positioning statement was “your guests get
Swiss cheese, Italian Pizza ...... you get stained glassware.''
 But Indians are reluctant to use dishwashers because of deeply
embedded cultural reasons. Thus, the message had to be changed to
appeal to the Indian housewife. Thus the positioning was changed to
“Bye, Bye Kanta Bai'' indicating that the dishwasher signaled the end
of the servant maid's tyranny. The brand, therefore, was repositioned
from a sophisticated, aristocratic product to one that is functional and
relevant to the Indian housewife.
Consumer Behavior
Consumer Buying Behavior
Consumer behavior is about how
individual make decisions to spread
their time, money and effort on
consumption related decisions.
“How do consumers respond to marketing efforts the
company might use?”
The Buyer Decision Process
Need Recognition
Information Search
Evaluation of Alternatives
Purchase Decision
Postpurchase Behavior
The Buyer Decision Process
Step 1. Need Recognition
Need Recognition
Difference between an actual state and a desired state
Internal Stimuli
External Stimuli
• Hunger
• TV advertising
• Thirst
• Magazine ad
• A person’s normal
needs
• Radio slogan
•Stimuli in the
environment
The Buyer Decision Process
Step 2. Information Search
Personal Sources
•Family, friends, neighbors
•Most influential source of
information
Commercial Sources
•Advertising, salespeople
•Receives most information
from these sources
Public Sources
Experiential Sources
•Mass Media
•Consumer-rating groups
•Handling the product
•Examining the product
•Using the product
The Buyer Decision Process
Step 3. Evaluation of Alternatives
Product Attributes
Evaluation of Quality, Price, & Features
Degree of Importance
Which attributes matter most to me?
Brand Beliefs
What do I believe about each available brand?
Total Product Satisfaction
Based on what I’m looking for, how satisfied
would I be with each product?
Evaluation Procedures
Choosing a product (and brand) based on one
or more attributes.
The Buyer Decision Process
Step 4. Purchase Decision
Purchase Intention
Desire to buy the most preferred brand
Attitudes
of others
Purchase Decision
The Buyer Decision Process
Step 5. Postpurchase Behavior
Consumer’s Expectations of
Product’s Performance
Product’s Perceived
Performance
Satisfied
Customer!
Dissatisfied
Customer
Cognitive Dissonance
Marketing Information system
 Marketing information system (MIS) is a set of
procedures and methods designed to generate,
analyze, disseminate, and store anticipated
marketing decision information on a regular,
continuous basis. An information system can be used
operationally, managerially, and strategically for
several aspects of marketing.
 Marketing informations can be used operationally,
managerially, and strategically for several aspects of
marketing.
 We all know that no marketing activity can be
carried out in isolation, know when we say it
doesn’t work in isolation that means there are
various forces could be external or internal,
controllable or uncontrollable which are
working on it.
 Thus to know which forces are acting on it and
its impact the marketer needs to gathering the
data through its own resources which in terms
of marketing we can say he is trying to gather
the market information or form a marketing
information system.
Sources of Information
 Internal company information – E.g. sales, orders,
customer profiles, stocks, customer service reports
etc
 Marketing intelligence – This can be information
gathered from many sources, including suppliers,
customers, and distributors.
 Market research – Management cannot always wait
for information to arrive in bits and pieces from
internal sources
Advantages
1. Organized data collection.
2. An avoidance of crises.
3. Coordinated marketing plans.
4. Speed in obtaining sufficient information to make
decisions.
Disadvantages
 The disadvantages of a Marketing information
system are high initial time and labor costs and the
complexity of setting up an information system